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Don't let black Friday take you into the red

Over here in the UK black friday is increasingly becoming a bigger event (despite the fact we don't do thanksgiving so it seems odd to have a place in UK culture). It is so easy to get caught up in the moment but don't let black friday drag you into debt (or hinder your progress for getting out of debt).

Shops love to lure you in with special deals, that get you up at the crack of dawn. The pressure to buy can feel overwhelming. Some easy ways to manage your spending on black friday are

  • Shop on cash (or debit card for online) only. Cant afford to pay cash (or the electronic equivalent) then you can't afford to buy what you are looking at. Take a pre-set amount of cash with you and once it is gone its gone.
  • Plan ahead, if you are going to be making purchased make a list of what you intend to buy (and ensure that they are things you need to buy and can afford). This could include thing that you intend to buy for christmas presents.
  • Stick to your list. When you start to deviate from your pre-set shopping plan that is when the problems arise and you start buying compulsively.
  • Use the method that reduces compulsion the most. Some people find being a physical shop worse than online shopping and visa versa.
  • Take a buddy who will hold you accountable (make sure its not someone who will compel you to buy more) and enjoy the shopping experience together whilst being responsible. 
As Dave Ramsey puts it 

What are Help to Buy ISAs?

The governments new 'Help to Buy ISA" is launching on December 1. Today's post will explain what this new financial product is and who is is best for. 

ISA are Individual Savings Accounts they allow for tax free savings up the cap set by the government each financial year.  The Help to Buy ISA is very similar to a cash ISA but there is the opportunity for a bonus. Individuals can save up to £200 a month with an initial deposit of up to £1000 and received a 25% bond.  The maximum that can be saved and receive a bonus is £12,000 and this is topped up to £15,000 when the saver goes to buy a home. 

The property must be less than $250,000 in London or £250,000 elsewhere. The money must go towards a deposit and not other fees to be able to receive the bonus. 

It is still not clear how interest rate will fluctuate for these ISAs as It was seen with Junior ISAs that shortly after their introductions rates decreased significantly. 

It is also not clear how much of your overall ISA allowance you can contribute to Help to Buy and if you will be able to contribute beyond the £12,000.

The ISA is individual, not based on your household. So both you and your partner (or whoever else you plan on purchasing a house with) could take our a Help to Buy ISA provided that you are both first time buyers. 

Be aware you cannot open a a cash ISA and HTB in the same tax year. If you have a cash ISA opened this year then it will need to be closed and the balance transferred before opening up a HTB or just wait until the next financial year to start.  Though some banks are offering a split ISA allowing you to hold a cash and HTB ISA at present Nationwide offers the best interest rate for this product. 

Several banks have signed up to offer the product. Halifax as of present offers the best rates at 4% interest and you are able to transfer the balance of a cash ISA towards the £1000 deposit. 

How to set and achieve your savings goals

Setting goals is a fundamental element to any budget. When you are working to get out of debt this is the primary goal. However, its easy to feel lost after you've gotten out of debt and it is therefore, important to set yourself some financial goals. 

These goals should be a mixture of short, medium and long term. But try not to have too many goals (about 5 in total is best). A common shorter term goal is often having a large emergency fund (of about 6 months to a year worth of expenses). However, you may also wish to save for other things such as DIY projects or holidays. 
Mid-term goals may include paying off you house, or saving for a down payment if your are yet to get onto the property market. Whilst longer term goals may be retirement, children's college and school funds. 

Whatever goals you choose to set it is important that they are attainable. Below are some top tips to making this goals achievable
  • Have a start date- it is so easy to postpone and procrastinate about starting to do something. Stop talking and start acting. Even if it means simply setting up a standing order to a savings account for the money to come out in the near future. Taking a positive action towards a goal is rewarding and has the same snowball effect as when paying of debt.
  • Have a end date- There will be points at which it is hard to maintain the goal and it seems like the easier option is to just quit. Having an end date to aim for helps with this. An end may be a time or a financial amount. It will also help you to calculate how much you need to save on monthly basis (or however often you save). 
  • Make sure the goals you have set are for you and your family. If you are setting a goals so you can 'keep up with the Jones' then it will be destined for failure. 
  • Use a visual- I love spreadsheets and these help me to visualise our finical situation and I also find them very motivating. However, some people like to use visual progress charts. 
  • Celebrate achieving a goal and break goals into smaller goals worth celebrating. 
  • Keep your savings system as simple as possible- having regular payments on standing order is usually the easiest way to manage a savings goal 
  • Dont overly restrict- Now you are out of debt, not every penny you have has to go towards your goals. Don't overload yourself with pressure but allow some money in your budget to enjoy life with. 
What financial goals do you have at the moment?
Disease Called Debt